Among the findings in the NSFC, was that forty-one percent of respondents reported spending less than their income.
The study also found, “36% spend about equal to their income, and 19% spend more than their income. These percentages have remained consistent across all four NFCS waves.”
“Although the overall percentage of Americans who spend less than they earn has been largely the same since 2009, further analysis reveals slight declines in saving among those least able to save. Among respondents with incomes of less than $25,000, the percentage who save has decreased by 4 percentage points relative to 2009, while it has not changed among those with incomes of $75,000 or more.” The NSFC also stated. “Differences also emerge by ethnicity. From 2009 to 2018, the percentage of respondents who spend less than they earn has decreased by 6 percentage points among African Americans, 3 points among Hispanics, 2 points among Asian-Americans, and zero points among White respondents.”
The NSFC defined financial capability as more than investable money. It also looked at financial literacy.
“Financial education matters. Both the amount and quality of financial education correlate positively with behaviors indicative of financial capability. Respondents who receive more financial education or believe their financial education was higher quality are more likely to save and less likely to overdraw their checking accounts, engage in fee-generating credit card behaviors, or use non-bank borrowing methods.” The NSFC report stated.
The NSFC found that people lag behind in investing knowledge compared to mortgage and other debt knowledge.
Seventy-three percent of respondents got the mortgage question right while only twenty-six got a bond question right.
Respondents were also asked questions about interest rates, inflation risk, and compound interest; the least respondents got the bond question correct.
“While the correct response to some individual questions reaches 73%, only 7% of respondents are able to answer all six questions correctly, and only 40% are able to answer at least four questions correctly, down slightly from 44% in 2015. Looking at only the five questions that have been asked in the NFCS since 2009, 23 we see a clear trend of declining financial literacy over the past nine years, though the differences in successive waves are small.” The NSFC stated.
The NSFC also found widespread use of mobile banking.
“New questions in the 2018 NFCS show that both online and mobile banking are common (84% and 65%, respectively). In addition, 39% of Americans report using websites or apps to help manage their finances. More than a third use their mobile phones for payments at the point of sale (35%) and for transferring money to another person (37%).”
It also measured financial anxiety and found: “For too many Americans, personal finances are a source of anxiety and stress. More than half (53%) agree that thinking about their finances makes them anxious, and 44% feel that discussing their finances is stressful, with respondents ages 18-34 reporting the highest levels of stress (63%) and anxiety (55%). With respect to gender differences, single women are more likely than their male counterparts to feel anxious or stressed about their finances. Sixty-one percent of single women feel anxious thinking about their finances compared to 52% of single men. Similarly, 52% of single women feel stressed discussing their finances compared to 42% of single men.”